Turnaround

Miami Mayor Manny Diaz is applying private-sector strategies to rebuild the foundations of his long-troubled city.

It's a measure of how cynical Miami residents can be about their city's politics that some still ask whether Mayor Manny Diaz is the real deal.

In less than three years the 49-year-old attorney and first-term officeholder has stabilized a city once on the brink of financial insolvency. Miami's bond ratings -- at junk status as recently as 2002 -- are at A+ thanks to a record $115 million in reserves and the launch of the city's first-ever capital improvement plan.

Capital investment is pouring in, with an estimated $15 billion in new construction projects under way or on the drawing board. In the past 2 1/2 years, Diaz says, the city's tax base has jumped 50% to nearly $21 billion.

Miami's reputation is on the mend as well. "We're the hottest city in the country," says the Cuban-born Diaz from his waterfront office in Coconut Grove, his tie characteristically loosened, his pinstripe suit crisp but unbuttoned. "I'm proud of our turnaround; proud that our image is changing."

In June, Diaz traveled to New York City to share that message at a conference hosted by the Manhattan Institute's Center for Civic Innovation titled "The Miami Renaissance."

There were many reasons to doubt whether a rebirth could occur at all, particularly in Diaz's brief tenure.

Miami certainly hadn't established a reputation for progressive leadership. Over the past decade, City Hall has been a cauldron of scandal and abuse of power where two city commissioners, two city managers, a former police chief and roughly a dozen lower-level officials have been indicted on federal corruption charges.

In 1996, an accounting scandal involving Miami's finance director left the city teetering on the verge of bankruptcy with a $68-million deficit.

The mayor's seat rarely attracted Miami's best and brightest. Diaz's predecessor, the mercurial Joe Carollo, nicknamed "Loco Joe," took office after Xavier Suarez, known for angrily banging on the doors of constituents late at night, was thrown from office in a voter-fraud scandal.

Diaz, hands clasped, motionless in his office rocking chair, explains that a combined sense of duty and shame led him to run for office. Miami was a prosperous city when he and his family arrived from Cuba in the early 1960s, but scandals and the city's fading reputation sickened him. Miami, he says, became the butt of jokes, "the laughingstock of the entire nation."

Diaz entered the 2000 mayoral race as an obscure attorney and businessman in a raucous field of 12. While unknown to the electorate, he was a career political insider capable of landing big money and key endorsements from Miami-Dade's business community. "Not once during the campaign did I utter the 'F' word," he says with a chuckle. "That's what set me apart."

In Miami, "F" stands for Fidel, and until now, in Miami's tinderbox of exile politics, candidates have been rated by the scale of their public vituperation of the aging Cuban leader.

"Manny Diaz got elected without pandering to the old guard Cuban-American community," explains Dario Moreno, a political science professor at Miami's Florida International University. "That really represents a turning point in Miami-Dade politics. With Diaz, we finally have a mayor who can focus on real issues affecting the city. That's significant."

Diaz lured retired publishing industry executive Joe Arriola to sign on, first as an adviser, then as city manager. Arriola earns $10 a year in token salary. The two moved quickly to streamline City Hall, applying private-sector strategies to a bureaucracy widely regarded as bloated and inefficient. They replaced many veteran city administrators with managers from Miami-Dade's corporate community.

Among their first moves was to create a liaison position to help developers navigate the city's regulatory maze. They established regular meetings with staff members of the city's five elected commissioners. And they reorganized the city's management structure to demand better accountability from the top down. For example, the city will soon have a "scorecard" to evaluate all employees.

Many were surprised when Diaz sidestepped ticklish ethnic jockeying by endorsing an outsider -- former Philadelphia Police Commissioner John Timoney -- to shake up the city's police department. Not unexpectedly, the changes have rankled many staffers. Some took early retirement, leaving the police force short-handed.

Short-term gains also are notable. The city's finances are back in order -- the millage rate is at a 50-year low -- and many residents say city services are improving. Diaz, a nationally known proponent of the faith-based social service delivery model, has launched a number of community educational programs targeting the working poor. According to the last Census, Miami is the poorest large city in America.

Last May, the usually irreverent alternative newsweekly Miami New Times named Diaz "Best Local Politician." Diaz shrugs off the accolade. "Coming from a business background, this job is easy," he insists, "because revenues, by and large, are assured. They may fluctuate, but you know they're coming. In what other industry is that true? I think government workers often take that for granted."

Some observers, while acknowledging the mayor's good intentions, question whether Diaz oversteps his bounds as mayor -- the city charter defines the officeholder as a policy-maker, not a manager -- by inserting himself in day-to-day operations. Arriola, a fiercely loyal man with deep admiration and respect for Diaz, doesn't hesitate in calling the mayor "the boss."

To Diaz, the issue is petty. He acknowledges his take-charge nature but insists he leads through consensus-building. Moreno agrees, pointing to the City Commission, where 5-0 votes have largely replaced the comic history of turf wars and paralyzing infighting. "That's a tremendous accomplishment for Miami," says Moreno.

Diaz will seek another four-year term in 2005. A registered Independent, he abandoned the Democratic Party (along with many other Cuban-Americans in Miami) after the Clinton administration's handling of the Elian Gonzalez affair. He discounts himself as a candidate for Congress or other legislative office, saying the executive nature of the mayor's seat suits him fine.

"I'm here because I believe that Miami is a great city with a great future," he says. "I didn't need to run for mayor, and if I'm not re-elected, that will be fine. I just hope to have some lasting impact while I'm here."